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Love ’Em or Hate ’Em: Spreadsheets Still Used by 70% of Estimators

It has been almost a year since many in the finance industry reacted bitterly to an executive who threatened to drop the popular software program Excel. “You’ll have to pry Excel from our cold, dead hands” was the refrain. By the looks of it, this love of spreadsheets isn’t just reserved for the financial industry.

It’s no secret that many in the construction industry—even contractors who eagerly use the latest and greatest software for estimating—still lean heavily on spreadsheets. Many of these complex spreadsheets are handed down from one estimator to another. Instead of reinventing the wheel, contractors use them over and over to keep track of pricing and for other tasks. In some cases, errors get repeated until one day someone realizes the data, like a price multiplier, is way off.

In the 2017 ConTech Report, JB Knowledge explored how construction companies are using tech tools, including spreadsheets, to complete day-to-day workflows. In looking at the repeatable processes that go into completing construction projects, they wanted to see how all tech tools were being used to minimize risk and maximize efficiency—including spreadsheets.

By department, they found the percentage still dependent on spreadsheets were as follows:

70% of estimating departments

59% of accounting departments

46% of project management departments

Ironically, these numbers reversed when looking at workflows, by department, most dependent on software: accounting came in at 85% followed by estimating with 60%, and project management and scheduling at 50%.

Duplicate Work Proves Risky

All of this begs the question: why are construction firms using both spreadsheets and estimating software? JB Knowledge was curious whether construction companies are using spreadsheets to transfer data between software solutions. They also were unsure if construction firms were using spreadsheets because their workflow software fell short.

Whatever the reason, most would agree that duplicate work is a risky proposition in terms of accuracy and efficiency. Having to triple-check your work to make sure all spreadsheet formulas are correct can be inefficient and not very sustainable.

This is a concern considering that nearly 90% of spreadsheets contain errors. As to productivity and profitability, a business could end up winning the low bid and losing money if labor and materials are miscalculated. Besides, spreadsheets offer no version control, which can result in substantial re-work. While spreadsheets may have the lowest bar for ease-of-use, they also make it more difficult to consolidate data input.

Is the Construction Culture to Blame?

Even while many in the field embrace everything from drones to wearable tech, cost estimators back in the office are often saddled with a mix of manual and digital workflows. Spreadsheets may be a step up from paper and colored pencils, but they do not reflect the latest and greatest tech tools available.

Why do contractors resist integrated estimating tools? For starters, the construction culture is fairly traditional and risk-averse. The majority of construction firms also tend to spend less than 1% of their annual sales volume on technology. With most jobs running 80% over budget and 20% over schedule, it is unclear why technology resistance is an accepted part of the culture.

Some of this spreadsheet addiction can be chalked up to management reluctance to new technology. But the ConTech Report noted that the most limiting factors in adopting new technology were lack of IT staff (39%), budget (38%), employee reluctance (33%), and management reluctance (32%). Even as the construction industry is booming and there is pressure to move faster, siloed solutions like spreadsheets continue to be part of some workflows.

Spreadsheets Alone are Not Professional Bids

However, for many contractors, manual estimates based on old data, unclear notes, and keystroke errors are not adding up to profitable projects. To avoid bidding too low or too high, some contractors are turning to estimating software like Quick Bid from On Center Software. If you’re ready to step up to software and reduce your dependency on error-prone spreadsheets, sign up now for a free demo of Quick Bid.